Neil Sadler & Claire Harding

Craft beer wars – was “Pacific Ale” a descriptive term?

Neil Sadler & Claire Harding

28 July 2016

Trade marks

Popular craft beer manufacturer, Stone & Wood, were claiming that Thunder Road’s use of the names ‘Pacific Ale’ and ‘Pacific’ was causing confusion among consumers, leading them to order a Thunder Road beer when what they really wanted was a Stone & Wood.  The beer rivals’ labels are below – confused, or not so much?

Stone and wood bottlePacific ale

Image: Stone & Wood’s Pacific Ale label (left) and packaging (right), extracted from pages 2 and 38 of judgment.

The Byron Bay craft beer manufacturer sought injunctive relief and damages from Elixir, the Melbourne distributors of Thunder Road, on the basis of misleading and deceptive conduct, passing off and trade mark infringement.   The Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820 decision was handed down in the Federal Court by Moshinsky J on 21 July 2016.

The ‘Pacific Ales’

In November 2010, Stone & Wood commenced selling Stone & Wood Pacific Ale.  It came to account for the vast majority of its sales.  In January 2015, Thunder Road commenced selling Thunder Road Pacific Ale.  The beer was later changed to Thunder Road Pacific, following demands by Stone & Wood.  It proceeded on the basis that the words Pacific Ale were merely descriptive of a type of beer and that Stone & Wood had no monopoly in the use of those words.   Images of the parties’ packaging are shown below:

stone and wood bottles            Thunder Road Pacific Ale

 

Image: Stone & Wood’s Pacific Ale packaging (left) and Thunder Road Pacific packing (right) extracted from page 2 of judgment.

Misleading or deceptive conduct and passing off

Moshinsky J found that the dominant feature of the Stone & Wood Pacific Ale bottle was the Stone & Wood logo.  The name “Pacific Ale” was much smaller and occupied a subsidiary position on the label, which was predominantly mustard in colour.

FINAL-S&W-Logo

 

 

 

 

 

 

Image: Stone & Wood’s registered trade mark extracted from page 4 of judgment.

Conversely, the dominant feature of the Thunder Road Pacific Ale was the name “Pacific Ale”, which contained bright green and orange colours in roughly equal proportions. Whilst the Stone & Wood label also contained green, it was darker and played a minor role only.

His Honour inferred that Thunder Road were, to some extent, seeking to take advantage of Stone & Wood’s success but held that it was not established that it intended to obtain such advantage through consumers thinking that its product was Stone & Wood Pacific Ale or that that was any association between the two products.

‘Pacific Ale’ a descriptive term?

By 2015 there were other examples of beers available on the Australian market which incorporated “Pacific” or “Pacific Ale” in the product name, namely, Yeastie Boys Stairdancer Pacific Ale; Garage Project’s Hapi Daze Pacific Pale Ale; Pacific Beverages Radler and Australian Breweries Pacific Pale Ale.

There was found to be no actual or likely confusion between Stone & Wood Pacific Ale and Thunder Road Pacific. To the extent that consumers identified with any sub-brand the cue or distinctive asset for the product was “Stone & Wood” or “Stone & Wood Pacific Ale” rather than “Pacific Ale”. This was relevant to the trade mark infringement case.

Since 2010 the term “Pacific” had come, it was accepted, to serve a function of describing beers from hops from Australia and New Zealand. By choosing a name for a product that had a descriptive aspect to it, Stone & Wood ran the risk that others in the trade would use it descriptively and that it would not distinguish the product.

In Anheuser-Busch Inc v Budejovicky, Narodni Podnik (2002) 56 IPR 182, it was found that “Budweiser” was a well-known mark with a brand reputation and was not a descriptive word to Australian English speakers.  Distinguishing from this case, His Honour stated that ‘Pacific’ is not a well-known mark, does not have a reputation as a brand, and does have a descriptive aspect.

Conclusion

There were significant differences between the registered trade mark and the words “Pacific Ale” or “Pacific”, these words were not essential features of the registered trade mark and were not deceptively similar.  The essential feature, if anything, was the wording “Stone & Wood”.   ‘Pacific Ale’ denotes a descriptive aspect, the use of which was not a representation by Thunder Road to the effect that there was a connection to Stone & Wood.  Accordingly, all claims failed.